Reactions to the report on the banking industry from the Parliamentary Commission on Banking Standards - which includes proposals for ten year bonus deferrals, greater individual accountability including the possibility of a jail term if actions are deemed reckless, and a tougher limit on bank leverage - have been coming in thick and fast.
City A.M.'s editor Allister Heath called the report a "mish-mash of good and bad analysis; of robust, empirically-grounded comments and sweeping, unsubstantiated, ideological and even inflammatory assertions; and powerful pro-competition and anti-subsidy arguments combined with nonsensical attacks on shareholder rights, freedom of contract and even the right to make a mistake."
On the proposals for pay, head of PwC's reward practice Tom Gosling says that overall they are sensible, but is sceptical about the extent to which deferred bonuses will change behaviour. The Commission missed the opportunity to encourage regulators to "look more closely at the link between pay and performance at the individual level, which is where cultural change bites".
On competition, CBI director-general John Cridland said that "moves to improve the transparency around the price of products and services are welcome and alongside seven-day switching, will help restore confidence in the competitiveness of retail banking". He adds that the CBI is pleased the Commission has recognised the importance of alternative sources of finance like peer-to-peer lending and crowdfunding to help growing businesses compete.
On the jailing of "reckless" bankers, shadow business secretary Chuka Umunna says this will help incentivise them to do the right thing.
I've said before that until we see custodial sentences given to bankers for egregious wrongdoing, we won't see the cultural change needed— Chuka Umunna (@ChukaUmunna) June 19, 2013
Market commentator David Buik agrees.
Banking Standards Committee recommending criminal liability for transgressors -absolutely! Of course bank management must be held to account— David Buik (@truemagic68) June 19, 2013